HMRC has asked accounting firms for volunteer businesses from their client base to apply for its Making Tax Digital for VAT pilot. However, concerns remain about the availability and significance of the software that will be used.
The pilot is slated to begin in April 2018, with a small number of selected businesses submitting their VAT returns via the new system.
According to an HMRC statement, the tax authority will then monitor the progress of the submitted VAT returns to ensure the system is working as expected before the service is opened up to further businesses, individuals and landlords.
“All you need to do is submit your VAT return using the new system,” HMRC said in a statement. “You’ll have access to plenty of help if you need it and will be able to check you’re doing things right as you go along.”
What are the benefits?
HMRC’s statement highlighted a number benefits to businesses of taking part in the scheme, including:
- The opportunity get used to the new VAT return system before it becomes mandatory
- Having access to more support from HMRC
- Being kept personally up to date with what is happening as the service develops
- The ability to influence how the service looks and feels
The Revenue also outlined that businesses would be put under no greater scrutiny by taking part, as monitoring would be for testing only; there are no additional compliance checks. Businesses would also be free to leave the trial at any time.
According to an ICAEW statement, HMRC has told them that even if a business does not currently use software they will be able to access the pilot by working with a suitable supplier to ensure it has access. How this will work in practice remains unclear at this stage.
In spite of HMRC’s assurances, industry insiders have also questioned whether the software capabilities will exist for businesses to be able to file their VAT returns.
A number of software houses that spoke with AccountingWEB said their products would not be ready for the April start date.
Thomson Reuters’ tax product manager Mark Purdue said that while his firm is planning on taking part in the scheme, its MTD for VAT product is likely to make its first submission later on in the year.
“Our focus is still on tweaking around GDPR. As important as the pilot is, we’re not going to launch a product that’s not ready,” said Purdue. However, he was confident that there will be suppliers taking part in the trial from day one.
An HMRC spokesperson told AccountingWEB: “We are working with a large number of software developers who are developing products and several are planning to have products available from the start of the pilot, with a pipeline of further products to follow.”
Chris Wade, Sage’s UK VP of product, said that some of the software house’s flagship products are likely to be ready from the start of April, and the firm will be actively recruiting participants for the pilot.
According to Wade, two of the firm’s leading products Sage Business Cloud and Sage 50 Cloud will be ready to submit VAT returns, although exact timings have yet to be finalised.
If you or your clients wish to express an interest in the trial, contact HMRC at [email protected]. HMRC will then send you a short survey which will help them establish specific features about the business in order to manage the trial period.